KUALA LUMPUR: Fugitive businessman Low Taek Jho or Jho Low told AmBank his team was looking to set up a sovereign wealth fund – the predecessor of 1Malaysia Development Berhad (1MDB) – two years before it was officially formed, the High Court here heard.

Joanna Yu Ging Ping, 51, a former relationship manager at the bank, said she was introduced to Jho Low, Tan Vern Tact and Nik Faisal Ariff Kamil by her then team leader, Chan Wan Seong, in 2007.

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Initially established in 2009 as an entity owned by the Terengganu state government, the Terengganu Investment Authority (TIA) was later renamed 1MDB.

Yu said she got to know Jho Low when Chan assigned her to handle the loans of Majestic Masterpiece Sdn Bhd in 2007.

"This company was looking to acquire the shares of two other companies, namely Loh & Loh Corporation Berhad and Putrajaya Perdana Berhad.

"Majestic Masterpiece was owned by Wynton Private Equity Group and Abu Dhabi Kuwait Malaysia Investment Corporation. Jho Low was one of the directors of Wynton Private Equity Group.

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"Not long after the Majestic Masterpiece loan was approved by the bank and the acquisition of the entities above completed, Jho Low informed the bank that his team was looking to set up a sovereign wealth fund to raise funds to develop Terengganu,” she said.

Yu, the 41st prosecution witness, was reading out her statement at Datuk Seri Najib Razak’s corruption and money laundering trial involving RM2.3bil belonging to 1MDB.

She said she attended a meeting in 2009 with Jho Low and several others to come up with the related bond issuance.

Those who attended the meeting included Casey Tang and Datuk Shahrol Azral Ibrahim Halmi, several AmBank officers such as Chan, and several members of the bank’s debt capital market division.

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Tang would later become 1MDB’s business development executive director and Shahrol Azral would become its chief executive officer.

"In this meeting, Jho Low and Tang asked many questions (on) the typical issues involved in the issuance of a bond, the structures and the timeline to issue.

"We were initially asked to provide a proposal for a RM10bil bond issuance with a 30-year tenure.

"My colleagues from the Treasury and Debt Capital Market Division shared that there may not be enough investors (to achieve) the size of RM10bil and that a 30-year bond tenure in Malaysia was also unprecedented.

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"Several suggestions were discussed, among them being a government guarantee for the bonds, to reduce the size of the bond issue, and also to shorten the tenure. Following this meeting, there were several other discussions.

"Eventually the client (TIA) agreed to a reduced issuance size of a RM5bil government guarantee bond for a period of 30 years.

"I am not sure who made the decision to have a government guarantee for this bond, but as far as I know, the bank’s Treasury and Debt Capital Market Division did share that a government guarantee may be required for a bond period exceeding 20 years.

"Normally, it is the customer who makes the final decision on the bond structure and for 1MDB, the client was instrumental in procuring the government guarantee for the bond,” Yu said.

She added that once the issuance was agreed upon, TIA opened an account at AmBank for the purpose of receiving the bond's proceeds.

Najib, 69, faces four charges of using his position to obtain bribes amounting to RM2.3bil belonging to 1MDB and 21 charges of money laundering involving the same amount.

The trial before Justice Datuk Collin Lawrence Sequerah continues. – Bernama